As of yesterday, people in Ontario, Manitoba, Ontario, Saskatchewan and New Brunswick started paying MORE for gas as the carbon tax kicked into effect. So let’s take a quick look at the what, why and how much will I pay questions…
Why a Carbon Tax?
The government says that putting a price on carbon will reduce emissions 50-60 million tonnes by 2022 and will help ensure that Canada can meet the reduction targets it agreed to at the Paris climate summit.
Why These Provinces in Particular?
The federal government is imposing the plan because the provinces affected, did not set up their own provincially run carbon tax plans ( New Brunswick introduced a tax, but the federal government didn’t think it met federal climate change benchmarks).
OK, So What Does this Mean for My Household Costs?
Based on federal figures, the tax will result in an cost increase of 4.42 cents a litre for gasoline, 5.37 cents for home heating fuel, 3.91 cents per cubic metre for natural gas and 3.10 cents per litre for propane.
Based on those figures, the average Ontario household will pay about $10 more a month for natural gas (based on average of 252 m3 of consumption) as of April 1.
The figure will be lower in the summer but possibly a lot higher in the winter, when natural gas consumption for heating rises significantly.
How Will the Carbon Tax Roll Out?
Those costs are expected to rise each year as the carbon tax increases by $10/tonne until it hits $50 in 2022 — meaning those costs will more than double in less than three years’ time.
Consumers will not pay the tax directly to the federal government; rather, Ottawa will impose the tax on fuel and production and distribution companies, which will in turn pass on those costs to customers.
Do I get a Rebate?
Yes. To compensate for the cost of living increase, the federal government says it will return every single dollar it collects in carbon tax to the people in the province in which it was collected.
Here is how the average household (defined by Ottawa as 2.6 people) will receive from the federal government in Ontario:
The federal government says the carbon tax is a sensible way to protect the environment — put a price on activities that pollute to discourage emissions, and give back most or all of the money through income taxes.
Ontario Premier Doug Ford is not a fan. He has described the carbon levy as a “job-killing” tax that will increase prices on everything.
The U.S. does not have any kind of carbon levy or carbon charge so there are concerns from some critics that it will affect the bottom line and Canada’s ability to be competitive in the market.
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